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Tuesday, May 30, 2017

“A RENT REVENUE STREAM EQUAL TO 1.3 ANNUAL DEBT SERVICE COVERAGE” Is There A Direct Connection Between MDN Development's Grand Traverse Academy Expansion & Steven Ingersoll's Line Of Credit Debt? With GTA Lease Payments Pegged At 130% Of MDN Development's Mortgage Loan, You Bet There Is!

In early March 2014, Steven Ingersoll set into motion a plan that, if it had succeeded, would have allowed him to maintain control of the Grand Traverse Academy, build a long-desired expansion at the school and pay off the massive business debt he owed Traverse City State Bank (TCSB). 

Having renegotiated the repayment terms of his $989,825 line of credit debt with Daniel J. Stahl, TCSB’s Senior Vice President of Commercial Lending, in late February 2012, Ingersoll engineered the remarkably swift off-loading of that obligation from his Smart Schools Management, Inc. to Mark Noss, then president of the Grand Traverse Academy’s board of directors. 

A contemporaneous string of emails from early March 2014 between Steven Ingersoll, Mark Noss and Dan Stahl reveals a deal was struck on March 16, 2014 for Noss to assume the obligation to repay Ingersoll's outstanding debt, days before the GTA board voted to sever ties with Ingersoll. Noss wasn’t formally awarded a management contract until March 19, 2014. 

Right after he assumed control of the GTA, Noss began making $12,500 monthly payments to Ingersoll. Finally forced in March 2016 by a whistleblower’s disclosure to acknowledge the payments, Noss explained that he had continued to speak with Ingersoll “for guidance with respect to regulation, compliance, and reporting, as well as the requirements of the State of MI, LSSU, and our bond issue” even though he was barred by a federal restraining order from contacting Ingersoll during the early months of 2015. 

What if the business advice Noss was getting from Ingersoll wasn’t for the day-to-day operation of the GTA? 

Instead, is it possible Ingersoll and Noss were discussing another plan, one that was structured to cover all its costs, delivering a massive profit to its investors while retiring the TCSB line of credit debt obligation Noss assumed from Ingersoll? 

There’s only one project that would have ticked all those boxes: MDN Development, LLC’s construction of a math and science building at the Grand Traverse Academy. 

This is how they planned it — and how it all fell apart.  

SUCCESSION PLAN

On July 27, 2012, five months after Steven Ingersoll renegotiated his $989,825 Traverse City State Bank line of credit debt, he hired Bloomfield Hills-based criminal defense attorney J. Terrance Dillon. Dillon would later be replaced by Detroit-based Martin Crandall and Jan Geht, who'd both represent Ingersoll during his 2015 tax evasion and conspiracy trial.

By early March 2014, Ingersoll had rejected a plea deal, choosing instead to go to trial. 

With three days to go before Noss ascends to the seat of management, Ingersoll has already negotiated the restructuring of a new deal, with Noss assuming the obligation to pay the $925,000 balance of a $1,000,000 line of credit loan originally made by TCSB to Steven Ingersoll's Smart Schools Management, Inc.
Ingersoll later softens the blow, pitching $5,000 monthly payments during the initial year of a 10 year amortization.
Stahl counters on March 17, 2014, extending the repayment period and lowering the interest rate:

“To further aid in this strategy, we have agreed to extend our repayment period from five years to ten years, and reduce the interest rate from a floating rate that is currently at 5% down to a fixed rate of 4% for the entire term of the repayment period. Finally, we will offer an “interest only” payment period for the first 12 months, resulting in a total eleven year repayment period.” 

Deal made, the GTA board votes on March 19, 2014 to sever ties with Steven Ingersoll's Smart Schools Management, Inc. while cleaving to Mark Noss and his Full Spectrum Management, LLC.

And just a few months later, the second phase of this plan emerges, but it will remain a secret for nearly a year.

I AND STEVE ARE 2 OF THE FIVE 

Burton, Michigan optometrist Brad Habermehl joined the GTA board of directors in October 2012, and was elected president during the same early morning March 19, 2014 meeting that elevated Mark Noss to management of the Traverse City charter school.

A longtime Ingersoll crony, Habermehl was an amiable functionary, serving as the GTA board's spokesperson, capped by his reading of this statement in support of Ingersoll during its July 17, 2014 meeting:

“If not for the efforts and intellectual contributions of Dr. Steven Ingersoll and Kaye Mentley and Smart Schools’ willingness to rebate its earnings, GTA would not likely exist today. Over the years GTA needed substantial financial support and Smart Schools always supplied what the Academy needed. 

Analysis of GTA’s audited financial statements and board minutes from June, 2004 through March, 2014 shows that Smart Schools gave GTA from its budgeted and contractually authorized earnings. Additionally, Smart Schools planned to rebate another $1.6 million from its future earnings which is classified on GTA’s books as a non-spendable asset. 

Smart Schools founded and funded GTA from its origin. GTA flourished in large part because Smart Schools was willing to rebate its contract and budgeted authorized earnings during GTA’s lean years of infancy, expansion and State funding reductions. 

With Smart Schools no longer associated with GTA the board will now go into closed session to consider disposition of the $1.6 million non-spendable asset.” 

The July 18, 2014 edition of the Traverse City Record-Eagle quoted Habermehl post-meeting pondering: "Do we sue Smart Schools or take it to court? What are our options? The $1.6 million has been haunting us for over a year now.” 

The GTA board apparently came to no definitive conclusion during its July 17th meeting, except for the apparent revelation that Steven Ingersoll was actually a “philanthropist” and not a “thief”. 

On November 24, 2014, Brad Habermehl sat down and wrote an email to a business associate, John Reigle, soliciting a $300,000 investment in a “private school” project helmed by his “friend and colleague”, federally-indicted Steven Ingersoll.


PART 2-THE CONCLUSION: Armed with a “signed lease between MDN Development, LLC and GTA with a revenue stream equal to 1.3 annual debt service coverage”, Mark Noss and his partners could have made millions. Coming tomorrow!















FROM DICKING AROUND TO JUST PETERING OUT: Lord Pretentious Returns To Take Another Whack At Freedom. His New Strategy? Blame Attorney Jan Geht!


“At some point, the petitioner prays the Court may interpret Ms. Parker’s tactics for what they are — an abuse and an affront to the spirit, purpose and meaning of the Bill of Rights.”

That quote, plucked from Steven Ingersoll's May 26, 2017 rebuttal to the government's opposition to his January 24, 2017 pro se motion to set aside his tax fraud and conspiracy convictions, sums up the wispy, 687 word opposition filing — more self-absorbed unhappiness about his self-inflicted victimhood. 

Sounding more like a crackpot version of Sun Tzu's “The Art of War”, Ingersoll's filing proclaimed Assistant United States Attorney Janet Parker (who headed the prosecution team) “wielded the unlimited power and resources of the federal government to outlast the defendants. What could not be won on merit could be won in a siege strategy.” 

That coming from a guy who refused to take the stand and testify in his own defense!

Here's the entire rebuttal:

BRIEF 
Steven Ingersoll was charged in an indictment with conspiracy to commit bank fraud (count 1), conspiracy to evade taxes (count 2) in a scheme described in the overt acts of the indictment, government oral arguments, opening and closing statements and submitted “theory in chief”. The government’s theory was that Ingersoll diverted funds from an existing school, Grand Traverse Academy, and a Chemical Bank construction loan and failed to report the diverted school and bank funds as income. The government also charged Ingersoll with wire fraud related to the diverted funds (counts 3, 4 and 5) along with two counts of impeding the IRS in their duty to collect taxes (counts 6 and 7). He rejected the government’s plea offers, a multi-week trial was conducted in February and March 2015.

REBUTTAL TO OPPOSITION BRIEF 
Ms. Parker’s arguments were filled with false accusations, mischaracterizations of events, character assassination, unsupported assumptions and procedural deflections designed to move the Court away from considering the merits of the petitioner’s argument. Ms. Parker has repeatedly demonstrated reliance on such tactics throughout the entire process of the two related cases (20216 and 20622). 

Ms. Parker’s behavior has been contemptuous to the spirit of the constitution. She has misused the vast power entrusted to her. This writer can only hope that her behavior is anomalous, if not, I fear for the future of our country. 

At trial Ms. Parker misled the jury as to her burden of proof by describing it as a balanced scale. Ms. Parker repeatedly motioned the court with allegations of obstruction of justice and witness intimidation misusing the powers entrusted her as a means of eliminating defendants’ right to defend themselves. All of Ms. Parker’s numerous obstruction motions were rejected but achieved their objectives of draining defendants’ energies and resources. Ms. Parker wielded the unlimited power and resources of the federal government to outlast the defendants. What could not be won on merit could be won in a siege strategy. 

Ms. Parker ironically argues that Petitioner’s arguments are without merit by stating that Mr. Geht was the attorney responsible for cross-examination of prosecution witness James Camiller, Mark Taylor, and Rebecca Clawson who along with education policy witnesses Jared Burkhardt and Dan Hanrahan all testified regarding the charter of transactions between the school, Grand Traverse Academy and Management Company, SSM. Ms. Parker apparently failed to realize that Mr. Geht’s failure to elicit the irrelevant nature of Grand Traverse Academy to SSM transactions bolsters ineffective assistance argument.

Ms. Parker’s disingenuous contention that Meg Hackett’s testimony was trivial to conviction is inconsistent with the emphasis and effort that both Parker and Hackett expended to confuse and conflate transactions and participants salient to Ingersoll’s taxes.

Ms. Parker in another misguided effort to argue that Ingersoll’s representation was adequate cites Mr. Crandall’s cross examination of laborers Jason Walbecq and Matthew Scherrett. Ms. Parker failed to recognize Crandall’s failure to emphasize that both witnesses denied Ingersoll’s involvement in their pay or that Ms. Parker presented no evidence that Ingersoll had any awareness or involvement in Bradley’s payroll practices. Crandall failed to point out to the jury the complete lack of evidence linking Ingersoll to Bradley’s payroll violations, the only basis for a conspiracy conviction after Count 1 was dismissed. Crandall’s failure left the only remaining possibility of a Count 2 conviction unaddressed.

Ms. Parker notes that Mr. Geht cross examined government witness Marna Wilson regarding state tax credits to demonstrate competent representation. Ms. Parker failed to realize that Mr. Geht failed to elicit the fact that the tax credit proceeds about with Ms. Wilson testified were used to repay the shareholders loans that was the central question of the trial.

Tax credits? Repayment of shareholder loans?

Wait, that sounds familiar. 

Oh, here it is, in the February 27, 2012 Traverse City State Bank analysis Ingersoll included with his voluminous January 24, 2017 pro se filing!

Except it wasn't a shareholder loan Ingersoll promised to pay off in 2012 with the expected resale of $900,000 of Brownfield Redevelopment credits awarded to a clutch of Ingersoll-controlled LLCs by the State of Michigan between 2010 and 2011it was Traverse City State Bank! 

Surprised? You shouldn't be.


Ingersoll was awarded $1,523,071 in tax credits by the Michigan Economic Growth Authority (MEGA) Board between 2010 and 2011:

December 22, 2010: Swarts Tower, LLC: $400,000; 108 Linn Street 

March 22, 2011: Madison Arts, LLC $332,750; 400 N. Madison
Avenue 

September 29, 2011: Oddfellows Hall, LLC $161,571; 1900 Broadway 

October 27, 2011: Wolverine Arts LLC $393,750; 114 N. Jackson Street 

December 15, 2011: Historic Arlington Hotel LLC $200,000; 201 Linn Street 

December 15, 2011: Lind Studio LLC $35,000; 100 State Street

With the exception of 400 N. Madison Avenue (the Bay City Academy's former Madison Arts campus, now shuttered after Steven Ingersoll defaulted on its USDA-backed mortgage), Ingersoll never lived up to his inflated investment promises. 

None of the other buildings were rehabbed or received occupancy permits, a fact confirmed by an official in the Building department of the City of Bay City.


Not the Linn Street building, shown at left and described as a fire sale by a realtor who advised potential buyers its unsafe condition required them to sign a waiver before a showing, or the aptly named Oddfellows Hall on Broadway that sits empty.


Or the so-called Lind Studio building on State Street, empty and moldering in the spring humidity.

None of the projects were initiated, leaving nearly $1.2 million in transferable credits that could be resold to a developer. At an estimated 70 percent of face value (an accepted industry benchmark), Ingersoll would have roughly $850,000 to offer on the resale market.

But there's no way to determine if Ingersoll actually sold the credits in a private transaction, as the State of Michigan does not capture resale information.

So Ingersoll promised to use his Brownfield windfall repay his Traverse City State Bank line of credit debt which, according to Stahl's February 27, 2012 analysis, was $989,825. 

And Stahl was sweating it, as you can see below.

Ingersoll was apparently stringing Traverse City State Bank along and, with Stahl's assistance, bought a few more months with the resale promise.



Assuring the bank's board in his analysis that Ingersoll was worthy of an extension, even reminding the officials that Kaye Mentley and her husband “are also long time customers with TCSB”, Stahl successfully renewed Ingersoll's line of credit debt — leaving $925,000 behind in 2014 for his fall guy Mark Noss to clean up.

We close with the final paragraph of Ingersoll's petition:

Ms. Parker closed in her characteristic fashion by once again falsely characterizing petitioner’s defensive efforts as fraudulent representations to the Court. Each and every one of Ms. Parker’s many claims of obstruction of justice were rejected by the Court. At some point, the petitioner prays the Court may interpret Ms. Parker’s tactics for what they are — an abuse and an affront to the spirit, purpose and meaning of the Bill of Rights.

As I've lost my ability to translate Jackass into English, I'll wait for the prosecution to respond.